R311-212-8. Servicing the Loans

  (a) The Director shall establish a repayment schedule for each loan based on the financial situation and income circumstances of the borrower and the term of loans allowed by Subsection 19-6-409(8)(b)(ii). Loans shall be amortized with equal payment amounts and payments shall be of such amount to pay all interest and principal in full.

  (b) The initial installment payment shall be due on a date established by the Director. Subsequent installment payments shall be due on the first day of each month. A notice of payment and due date shall be sent for each subsequent payment. Non-receipt of the statement of account or notice of payment shall not be a defense for non-payment or late payment.

  (c) The Director shall apply loan payments received first to penalty, next to interest and then to principal.

  (d) Loan payments may be made in advance, and the remaining principal balance of the loan may be paid in full at any time without penalty.

  (e) Notices of late payment penalty assessed with amounts of penalty and the total payment due shall be sent to the borrower.

  (f) The penalty for late loan payments shall be 10 percent of the payment due. The penalty shall be assessed and payable on payments received by the Director more than five days after the due date. A penalty shall be assessed only once on a given late payment. Payments shall be considered received the day of the U.S. Postal Service post mark date or receipted date for payments delivered to the Director by methods other than the U.S. Postal Service. If a loan payment check is returned due to insufficient funds, a service charge in the amount allowed by law shall be added to the payment amount due.

  (g) Notice of loans paid in full shall be sent after all penalties, interest and principal have been paid.

  (h) Releases of the Director's interest in security shall be prepared and sent to the borrower or filed for public notice as applicable.